AlGaN plays a vital role in hetero-structure high electron mobility transistor by employing a two-dimensional electron gas and as electron blocking layer in the multi quantum well light emitting diodes. Nevertheless, the incorporation of Al in GaN for the formation of AlGaN alloy is limited by the diffusion barrier formed by instant nitridation of Al adatoms by reactive atomic N. Incorporation of Al above the miscibility limit, however can be achieved by ion beam technique. The well known ion beam mixing (IBM) technique was carried out with the help of Ar + irradiation for different fluences. A novel approach was also adopted for the synthesis of AlGaN by the process of post irradiation diffusion (PID) as a comparative study with the IBM technique. The optical investigations of AlGaN nanowires, synthesized via two different methods of ion beam processing are reported. The effect of irradiation fluence and post irradiation annealing temperature on the random alloy formation were studied by the vibrational and photoluminescence (PL) spectroscopic studies. Vibrational studies show one-mode phonon behavior corresponding to longitudinal optical (LO) mode of A1 symmetry (A1(LO)) for the wurtzite phase of AlGaN nanowires in the random alloy model. Maximum Al atomic percentage ~6.3-6.7% was calculated with the help of band bowing formalism from the Raman spectral analysis for samples synthesized in IBM and PID processes. PL studies show the extent of defects present in these samples. a)